Estonian minimum wage 2026: 946 EUR a month, 5.67 EUR an hour

What changed on 1 April 2026?

The government set the 2026 minimum wage at 946 EUR a month and the minimum hourly rate at 5.67 EUR. The new rate applies from 1 April 2026; until 31 March it was 886 EUR a month and 5.31 EUR an hour. The rise is 60 EUR a month, or 6.8%.

In practice, full-time pay for April cannot be below 946 EUR and hourly pay cannot be below 5.67 EUR. If a contract states exactly the minimum rate, the salary has to go up from April even if nobody reviewed the contract.

The social tax monthly base did not change: it is 886 EUR for the whole of 2026, with a minimum obligation of 292.38 EUR a month. Benefits tied to the minimum wage, such as the floor of the parental benefit for a parent who had earnings, rose together with it.

• January-March 2026: 886 EUR a month, 5.31 EUR an hour, net 820.20 EUR, employer cost 1,185.47 EUR.
• From April 2026: 946 EUR a month, 5.67 EUR an hour, net 865.31 EUR, employer cost 1,265.75 EUR.
• Change: gross +60 EUR, net +45.11 EUR, employer cost +80.28 EUR a month.

What is left of the minimum wage?

A minimum-wage employee is the biggest beneficiary of the basic exemption, because the 700 EUR tax-free amount covers a large share of their pay. Very little income tax remains. The figures use the 946 EUR rate in force from April, with a 2% pillar II contribution.

• Gross 946 EUR.
• Unemployment insurance 1.6%: 15.14 EUR. Funded pension 2%: 18.92 EUR.
• Taxable income: 946 - 15.14 - 18.92 - 700 = 211.94 EUR.
• Income tax 22%: 46.63 EUR. Net pay 865.31 EUR.
• The whole of 2026 (3 months at 886 EUR, 9 months at 946 EUR): 11,172 EUR gross and 10,248.39 EUR net.

The effective tax rate is just 4.9%

Only 46.63 EUR of income tax comes off 946 EUR, which is 4.9% of gross. The statutory rate for the same employee is 22%. From January to March, on 886 EUR, the tax was 33.90 EUR, or 3.8%.

The whole difference is the basic exemption. Because it is a fixed amount, it weighs heavily at a low salary and almost nothing at a high one. That is why Estonia's proportional income tax is progressive in practice even though everyone faces the same rate.

Without a basic exemption application

For a minimum-wage earner the basic exemption application matters more in cash terms than for anyone else. Without it, income tax is withheld on the whole amount left after unemployment insurance and the pension contribution: 911.94 EUR × 22% = 200.63 EUR.

Net pay then drops to 711.31 EUR, 154 EUR less than with the application. That is close to a fifth of normal take-home pay. The money is not lost, because the overpaid tax comes back next spring with the tax return, but in a monthly budget the gap is large. When starting a new job, file the application on day one.

The minimum wage at different pillar II rates and ages

The same 946 EUR leaves a different amount in your pocket depending on the pension contribution and whether the employee is of old-age pension age. In every case the employer cost is the same 1,265.75 EUR.

Raising the contribution reduces net pay by less than it adds to the pension account, because it is deducted before income tax: at 6% instead of 2%, 37.84 EUR more goes to the pension account but net pay falls by 29.51 EUR.

• Pillar II at 2%: net pay 865.31 EUR.
• Pillar II at 4%: contribution 37.84 EUR, net pay 850.56 EUR.
• Pillar II at 6%: contribution 56.76 EUR, net pay 835.80 EUR.
• No pillar II contribution: net pay 880.07 EUR.
• Pension age (776 EUR exemption), 2% contribution: net pay 882.03 EUR.
• Pension age with no pillar II contribution: net pay 896.79 EUR.

The same employee costs the employer 1,265.75 EUR

On top of the minimum wage come social tax of 312.18 EUR and employer unemployment insurance of 7.57 EUR. The total cost is 1,265.75 EUR a month, 33.8% above the figure in the contract.

An important detail: the monthly social tax base stayed at 886 EUR in 2026, so from April the full-time minimum wage is above it and social tax is calculated on the actual salary. From January to March the two figures were equal. For a part-time employee paid less, social tax of at least 292.38 EUR is still due, which makes very small contracts proportionally expensive.

Example: half-time work at the minimum rate

A half-time employee on the minimum rate in force from April earns 473 EUR. On the employee side the maths is simple: the salary is below the basic exemption, there is no income tax and almost the whole amount is paid out.

On the employer side it looks different. Proportional social tax would be 156.09 EUR, but the minimum obligation means 292.38 EUR is due. Two half-time employees therefore cost 1,538.32 EUR together, while one full-time employee costs 1,265.75 EUR, a gap of 272.57 EUR a month. If the minimum obligation does not apply in your situation, you can switch it off in the salary calculator.

• Gross salary: 473.00 EUR.
• Unemployment insurance: 7.57 EUR. Pension: 9.46 EUR. Income tax: 0 EUR.
• Net pay: 455.97 EUR.
• Social tax at the minimum: 292.38 EUR. Employer unemployment insurance: 3.78 EUR.
• Total employer cost: 769.16 EUR.

When pay rises above the minimum

Above the minimum wage a simple rule applies: each extra euro of gross pay leaves about 75 cents in your pocket. Unemployment insurance and the 2% pension contribution take 3.6 cents and income tax takes 22% of the rest, so 0.964 × 0.78 = 0.752. At the minimum wage the basic exemption is already fully used, so every further euro is taxed at the full rate.

For the employer each extra euro of gross pay costs 1.338 EUR, because 946 EUR is already above the monthly social tax base and social tax is calculated on the actual salary. Each extra euro reaching the employee therefore costs the employer about 1.78 EUR. That is worth knowing when discussing a raise after the first year.

• 946 EUR gross: net 865.31 EUR, employer cost 1,265.75 EUR.
• 1,000 EUR gross: net 905.92 EUR (+40.61 EUR), employer cost 1,338.00 EUR (+72.25 EUR).
• 1,200 EUR gross: net 1,056.30 EUR (+190.99 EUR), employer cost 1,605.60 EUR (+339.85 EUR).

How the minimum wage changed from 2023 to 2026

Over four years the monthly minimum wage rose from 725 EUR to 946 EUR. At the start of 2026 the gross figure stayed the same as in 2025, and net pay grew by 10.12 EUR only because the basic exemption rose from 654 EUR to 700 EUR. April added a 60 EUR gross rise worth another 45.11 EUR net.

In 2024-2026 the monthly social tax base equalled the previous year's minimum wage: 725, 820 and 886 EUR. In 2023 the base was 654 EUR. Below is each year's minimum wage with net pay (pillar II at 2%, exemption applied) and employer cost.

• 2023: 725 EUR a month, 4.30 EUR an hour. Income tax 20%. Net 689.92 EUR, employer cost 970.05 EUR.
• 2024: 820 EUR a month, 4.86 EUR an hour. Income tax 20%. Net 763.18 EUR, employer cost 1,097.16 EUR.
• 2025: 886 EUR a month, 5.31 EUR an hour. Income tax 22%. Net 810.08 EUR, employer cost 1,185.47 EUR.
• 2026, January-March: 886 EUR a month, 5.31 EUR an hour. Income tax 22%. Net 820.20 EUR, employer cost 1,185.47 EUR.
• 2026, from April: 946 EUR a month, 5.67 EUR an hour. Income tax 22%. Net 865.31 EUR, employer cost 1,265.75 EUR.

Why the monthly and hourly floors do not match exactly

946 divided by 5.67 is about 166.84 hours, which is the average month at 40 hours a week. But no individual month is exactly average: some have more standard working hours than others.

For an hourly-paid employee, the actual hours in the month are what count. In a month with more standard hours, pay computed from the hourly rate comes out slightly above the monthly floor. For a salaried employee it does not: they receive the same amount every month.

For example, in a month with 168 working hours the 5.67 EUR rate gives 952.56 EUR gross, 6.56 EUR above the monthly floor. To work out net pay, enter that actual gross figure in the salary calculator rather than 946 EUR.

Common minimum wage mistakes

These mistakes happen to employees and to small employers who run payroll themselves.

• The employee does not file a basic exemption application and receives 711.31 EUR instead of 865.31 EUR.
• The cost of a part-time contract is estimated with proportional social tax, forgetting the minimum obligation.
• An hourly employee's net pay is worked out from the 946 EUR monthly floor although the actual gross is different.
• The minimum wage is compared with net pay: 946 EUR is gross, not what reaches the account.
• From April the monthly salary is raised to 946 EUR but the hourly rate is left at the old 5.31 EUR, although the new rate is 5.67 EUR.
• Treating 946 EUR as the social tax monthly base from April, when the base is 886 EUR for the whole of 2026.

Checklist for employees and employers

Before signing an employment contract or paying the first salary, go through these points.

• Employee: file the basic exemption application straight away and with one employer only.
• Employee: check the pillar II rate on your payslip and compare net pay with the calculator.
• Employer: for part-time work, budget at least 292.38 EUR a month in social tax.
• Employer: for hourly pay, calculate the monthly salary from the actual hours.
• Both: use the rates for the right period, because in 2026 the minimum wage changed mid-year.

Check it yourself

The salary calculator works out net pay from any gross amount and itemises every tax. The employer cost calculator shows the other half of the same payslip, including the minimum social tax obligation.